Wednesday, April 28, 2004

Operation Iraqui Liberation -- O.I.L.

Here's another consideration, as we wipe away tears for the
human cost of war in Iraq. What about the economy, stupid?
War is good for the economy, isn't it?

War in Iraq Aims a Bullet at the Heart of the Economy
By James K. Galbraith
Los Angeles Times

There's no indication that Bush thought through the potential for far-reaching fiscal damage

The U.S. had one good economic experience with war. World War II conquered the Depression, reindustrialized the country and built the middle class. But that was special. The U.S. fought WWII with full mobilization, super-high taxes, super-low interest rates, big deficits, price controls and rationing. Iraq isn't going to be like World War II.

Economically, the Iraq war is more like Vietnam: insidiously underestimated, sold to the public and Congress on false premises, improperly budgeted and inadequately taxed. During the Vietnam years, there was also economic growth at first. But then came creeping inflation, followed by worldwide commodity shocks, the oil crisis of 1973, international monetary disorder and a decade of economic troubles.

Could it happen again? Yes, it could.

Did Team Bush think through the economics of a long and costly war? There is no evidence it did. It counted on the war being quick, cheap and self-financing. If it thought about the long-range economics, there seems to have been only one goal: control of oil.


No comments: